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Room at the inn: 4 new hotels could bring 600 new rooms to Boulder

By Cory Lamz Camera Staff Writer

Posted:
07/15/2012 06:01:29 PM MDT

Updated:
07/15/2012 06:05:09 PM MDT

Manuel Cabarara guides the cement snorkel into the forms for the foundation of the new Hampton Inn & Suites at Gunbarrel Gateway being build at 6333 Lookout Road last week. The 100-roon hotel is one of four new hotels planned for the city of Boulder.
(
MARK LEFFINGWELL
)

Boulder's new hotels

The following hotels are in the planning process and could be completed within the next two years:

Despite the recession's major hit to hotel development -- including causing multiple projects across Boulder County to fizzle out during months- and years-long funding stalemates -- experts say the Boulder hotel industry's waiting game may soon end, thanks to new developments that could bring four new hotels, with nearly 600 total rooms, to the city in the next two years.

This recovery could be attributed to rising occupancy rates for hotels since 2008, experts say, as well as banks' willingness to back the industry once again.

"Nationally, the hotel industry is taking advantage of the bounce-back from the recession as well as limited new supply growth," Walter Isenberg, president and CEO of Sage Hospitality, a hotel and restaurant management company that oversees hotels in 26 states, said in an e-mail. "Both business and leisure travelers are returning."

But don't order champagne from room service just yet, as effects on the industry won't be visible in Boulder until at least June 2013, when the first development, the Hampton Inn & Suites at Gunbarrel Gateway by Boulder Hospitality LLC, is anticipated to open at 6333 Lookout Road.

Two other projects, the Hyatt planned for the Depot Square at Boulder Junction, at 30th and Pearl streets, and the Golden Buff redevelopment at 28th Street and Canyon Boulevard, remain in planning and approval stages, with Golden Buff plans going before Boulder's Planning Board on Thursday.

An artist s rendering of the hotel at 26th Street and Canyon Boulevard for Pedersen Development Co.'s planned redevelopment of the property currently occupied by the Golden Buff lodge and Buff Restaurant site in Boulder. The site will include two new hotels.

The Golden Buff redevelopment would replace the existing Golden Buff with two new hotels and remodel the attached restaurant, The Buff.

Together these three projects, featuring a combined four new hotels, will add 599 rooms to a market that already has 2,200 rooms available at the 25 hotels, motels and bed-and-breakfasts throughout Boulder. That's a nearly 30 percent increase in rooms.

There are two other wild cards as well.

Another hotel, the proposed Village Hotel along Canyon Boulevard, is on the books, having received city approval in 2006 -- but no further development plans have been submitted; the project appears stalled. And the Boulder Outlook Hotel, 800 28th St., could soon be sold. Owner Dan King said an undisclosed buyer is "seriously interested" in the hotel. He would not say whether the potential buyer plans to keep the Outlook as a hotel or convert it into apartments.

An artist s rendering of Depot Square at Boulder Junction, a planned development at 30th and Pearl Streets that will include a 150-room Hyatt hotel, an RTD station, apartments and retail.

"I'm always optimistic about hotels, but I'm also a realist," said Mary Ann Mahoney, executive director of the Boulder Convention & Visitors Bureau. "We don't want to start celebrating until everything gets through the city planning process."

The city's hotel surge magnifies national trends, which also have increased -- but not as drastically.

"There are very few projects getting funding or being built right now," said Joe McInerney, president of the American Hotel and Lodging Association. "2010 and 2011 were transitional years, but it's going to take us until 2015 to catch up to the average (development) rate we had in 2007, to include inflation.

An artist s rendering of the Gunbarrel Gateway development at 6333 Lookout Road, which will feature a 100-room Hampton Inn & Suites.

"It's really hard to get financing right now. Lenders are looking for more equity for a deal," McInerney added. "Banks are very, very slow in making decisions because they want to dot every 'i' and cross every 't.'"

No vacancy?

The Boulder hotel industry has seen encouraging gains from the past two years, with occupancy rates steadily on the rise.

For the month of June, Boulder saw a 6 percent increase in occupancy from 2011 to 2012 and a 7.9 percent increase from 2010 to 2011, according to survey results from the Rocky Mountain Lodging Report. And though June begins Boulder's tourist season, which peaks in August and ends by October, the city also has seen an increase in occupancy rates for non-peak months, such as April and May -- the latter of which saw a 5.3 percent rise from 2010 to 2012.

Encouraging numbers aside, experts are concerned that the four new hotels may not be viable within Boulder's market.

"More hotels would have an effect in reducing occupancy in the peak season," said Steven Wallace, president of the Boulder Hotel & Motel Association. "Initially, the new hotels will be feeding off the existent market we've created in Boulder. I would question the viability of more hotels in the off-season."

Experts agree that the time required for new hotels to stabilize in the market, meaning the point when they no longer pull from existing hotels' market share but rather draw in and maintain new clientele, averages 18 months.

By adding 600 new rooms to the Boulder market, will the hotel boom create a market implosion in the interim? Not necessarily.

"It just depends on timing," Wallace said. "If the 170 rooms of the Outlook go out and the Golden Buff and Hampton go in, we'd be neutral. The Hampton Inn would feed off of the existing market initially, but should bring in people who weren't staying in Gunbarrel before."

Developers broke ground on the Hampton Inn & Suites at Gunbarrel Gateway on June 18, with underground site work, including electrical, mechanical and plumbing now completed. Bill McDermid, co-developer for Boulder Hospitality LLC, which is overseeing the project, hopes to finish the exterior of the building -- the stucco, windows -- by October and the entire project by mid-June of 2013.

The Hampton Inn & Suites will offer two meeting rooms -- measuring at 900 and 500 square feet -- an indoor pool and spa, a fitness center, a free continental breakfast in a custom breakfast area and complimentary bicycles because "we're so close to the bike paths around here," McDermid said. The hotel is also pursuing a LEED Gold certification.

"With Boulder being such an energy-conscious environment, we hope that people will pay attention to our environmental features and capabilities and choose to stay with us to lessen their carbon print," McDermid said. "We want to be good community players and good neighbors."

Ultimately, the Gunbarrel Gateway project also will see the development of three other buildings, possibly including a free-standing restaurant, sandwich shop, coffee shop and FedEx-Kinko's location, McDermid said. However, plans for these buildings have yet to be finalized.

McDermid hopes to break ground on the other buildings by September or October and effectively complete them simultaneously with the hotel project.

"What we're looking for are tenants that are good for our hotel guests, but also useful to the area. Gunbarrel is kind of light on eating and other amenities," McDermid said.

New destinations

Though the Hampton Inn & Suites project may be completed before the Golden Buff redevelopment and the Hyatt Hotel at Depot Square, both headed by Pedersen Development Co., some say the projects won't compete for customers because of location.

"The Hampton Inn & Suites would affect Longmont more so than Boulder," said Wallace, president of the Boulder Hotel & Motel Association. "The Hampton Inn wouldn't have the same effect as something in the urban (area of Boulder) would have."

"There's plenty of market space for additional hotels," said Scott Pedersen, of Pedersen Development Co. "Gunbarrel is outside of the core Boulder market; we won't see much impact from that."

Pedersen hopes to break ground on the Golden Bluff redevelopment project next summer, once all of the approval processes with the city of Boulder have been completed. He anticipates the entire project to take 15 months.

Once completed, the Golden Buff project will offer approximately 212 rooms at its full-service hotel and 137 rooms at its limited-service hotel. The full-service hotel will be designed with larger room modules, a restaurant and bar, offer three meals a day and boast up to 10,000 square feet of meeting space, Pedersen said. The limited-service hotel will be equipped with small conference rooms and some convenience food.

"We're going to have really well-designed, cool modern buildings that are going to change the landscape on 28th and Canyon. The most significant thing it's going to do is improve the hotel and marketing capabilities of the city," Pedersen said.

The civil engineering work for Pedersen Development Co.'s second project in Boulder, part of Depot Square, is currently being finalized. That project, which still needs to be approved by Boulder's Planning Board, will include 150 rooms at the site's Hyatt hotel, as well as 71 affordable housing units, almost 5,000 square feet of meeting space and an RTD bus station.

"We are creating a new destination for people to go to," Pedersen said of Depot Square. "Our ultimate goal is taking a part of the city that's been ripe for redevelopment and accomplishing a lot of goals that City Council has desired for the area."

Manuel Cabarara guides the cement snorkel into the forms for the foundation of the new Hampton Inn & Suites at Gunbarrel Gateway being build at 6333 Lookout Road last week. The 100-roon hotel is one of four new hotels planned for the city of Boulder.
(
MARK LEFFINGWELL
)

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